Intuit Updates Second-quarter Outlook to Reflect Later Tax Season Opening

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--
Intuit Inc. (Nasdaq: INTU) today announced it expects a shift of tax
revenue, as well as GAAP and non-GAAP operating income and earnings per
share, from its second fiscal quarter (which ended Jan. 31) to its third
fiscal quarter as the Internal Revenue Service did not begin accepting
tax returns until Jan. 31. The company also reiterated full fiscal-year
guidance.

For the second quarter, Intuit expects to report:

Revenue of $775 million to $780 million.

GAAP operating loss of $45 million to $50 million.

Non-GAAP operating income of $10 to $15 million.

GAAP loss per share of $0.13 to $0.14.

Non-GAAP diluted earnings per share of $0.01 to $0.02.

The date of the IRS e-file opening has varied from tax season
to tax season, but has increasingly been delayed beyond mid-January,
this year to Jan. 31. The reasons have been associated with the passage
of late tax legislation, late budget and debt agreements, and this year
because of the 17-day government shutdown last fall.

The total expected shift is approximately $120 million. About $80
million of the anticipated shift in tax revenue is related to the
delayed IRS opening, causing taxpayers to file later than expected.
Approximately $40 million is related to state tax returns that were
received but not processed before the fiscal second quarter ended on
Jan. 31.

The late opening of e-file is not expected to impact full-year revenue
or operating income for Intuit or the Consumer and Professional Tax
segments. Intuit reiterated full-year revenue, operating income, and
earnings per share guidance.

For fiscal year 2014, the company expects:

Revenue growth of 6 to 8 percent.

GAAP operating income growth of 9 to 12 percent; non-GAAP operating
income growth of 7 to 10 percent.

“We are simply adjusting the timing, not our expectations,” said Sasan
Goodarzi, senior vice president and general manager of Intuit’s Consumer
Tax Group. “We remain optimistic about our strong brand campaign that
has already received accolades, and are confident that new innovations
across our end-to-end experience are already delivering in the current
year.”

The company will announce second-quarter results and will issue the
first of two season-to-date unit updates for its consumer tax products
and services on Feb. 20. The second unit update will be provided at the
end of the tax season.

About Intuit Inc.

Intuit Inc. creates business and
financial management solutions that simplify the business of life for
small businesses, consumers and accounting professionals.

Founded in 1983, Intuit had revenue of $4.2 billion in its fiscal year
2013. The company has approximately 8,000 employees with major offices
in the United States, Canada,
the United Kingdom, India
and other locations. More information can be found at www.intuit.com.

About Non-GAAP Financial Measures

This press release includes non-GAAP financial measures. For a
description of these non-GAAP financial measures, including the reasons
management uses each measure, and reconciliations of these non-GAAP
financial measures to the most directly comparable financial measures
prepared in accordance with Generally Accepted Accounting Principles,
please see the section of the accompanying Table 1 titled "About
Non-GAAP Financial Measures."

Cautions About Forward-looking Statements

This press release contains forward-looking statements, including
forecasts of Intuit’s future expected financial results for the second
quarter of fiscal 2014 and the 2014 fiscal year and expected shifts in
tax revenue.

Because these forward-looking statements involve risks and
uncertainties, there are important factors that could cause our actual
results to differ materially from the expectations expressed in the
forward-looking statements. These factors include, without limitation,
the following: inherent difficulty in predicting consumer behavior;
difficulties in receiving, processing, or filing customer tax
submissions; consumers may not respond as we expected to our advertising
and promotional activities; product introductions and price competition
from our competitors can have unpredictable negative effects on our
revenue, profitability and market position; governmental encroachment in
our tax businesses or other governmental activities or public policy
affecting the preparation and filing of tax returns could negatively
affect our operating results and market position; we may not be able to
successfully innovate and introduce new offerings and business models to
meet our growth and profitability objectives, and current and future
offerings may not adequately address customer needs and may not achieve
broad market acceptance, which could harm our operating results and
financial condition; business interruption or failure of our information
technology and communication systems may impair the availability of our
products and services, which may damage our reputation and harm our
future financial results; as we upgrade and consolidate our customer
facing applications and supporting information technology
infrastructure, any problems with these implementations could interfere
with our ability to deliver our offerings; any failure to properly use
and protect personal customer information and data could harm our
revenue, earnings and reputation; if we are unable to develop, manage
and maintain critical third party business relationships, our business
may be adversely affected; increased government regulation of our
businesses may harm our operating results; if we fail to process
transactions effectively or fail to adequately protect against potential
fraudulent activities, our revenue and earnings may be harmed; any
significant offering quality problems or delays in our offerings could
harm our revenue, earnings and reputation; our participation in the Free
File Alliance may result in lost revenue opportunities and
cannibalization of our traditional paid franchise; the continuing global
economic downturn may continue to impact consumer and small business
spending, financial institutions and tax filings, which could negatively
affect our revenue and profitability; year-over-year changes in the
total number of tax filings that are submitted to government agencies
due to economic conditions or otherwise may result in lost revenue
opportunities; our revenue and earnings are highly seasonal and the
timing of our revenue between quarters is difficult to predict, which
may cause significant quarterly fluctuations in our financial results;
our financial position may not make repurchasing shares advisable or we
may issue additional shares in an acquisition causing our number of
outstanding shares to grow; our inability to adequately protect our
intellectual property rights may weaken our competitive position and
reduce our revenue and earnings; our acquisition and divestiture
activities may disrupt our ongoing business, may involve increased
expenses and may present risks not contemplated at the time of the
transactions; our use of significant amounts of debt to finance
acquisitions or other activities could harm our financial condition and
results of operation; and litigation involving intellectual property,
antitrust, shareholder and other matters may increase our costs. More
details about these and other risks that may impact our business are
included in our Form 10-K for fiscal 2013 and in our other SEC filings.
You can locate these reports through our website at http://intuit2014.q4web.com.
Forward-looking statements are based on information as of February 11,
2014, and we do not undertake any duty to update any forward-looking
statement or other information in these materials.

[a] Reflects estimated adjustments for share-based compensation expense
of approximately $49 million; amortization of acquired technology of
approximately $7 million; and amortization of other acquired intangible
assets of approximately $4 million.

[b] Reflects the estimated adjustments in item [a] and income taxes
related to these adjustments.

[c] Reflects estimated adjustments for share-based compensation expense
of approximately $194 million; amortization of acquired technology of
approximately $25 million; and amortization of other acquired intangible
assets of approximately $14 million.

[d] Reflects the estimated adjustments in item [c], income taxes related
to these adjustments, and a net gain on discontinued operations of $46
million.

Non-GAAP financial measures should not be considered as a substitute
for, or superior to, measures of financial performance prepared in
accordance with GAAP. These non-GAAP financial measures do not reflect a
comprehensive system of accounting, differ from GAAP measures with the
same names and may differ from non-GAAP financial measures with the same
or similar names that are used by other companies.

We compute non-GAAP financial measures using the same consistent method
from quarter to quarter and year to year. We may consider whether other
significant items that arise in the future should be excluded from our
non-GAAP financial measures.

We exclude the following items from all of our non-GAAP financial
measures:

Share-based compensation expense

Amortization of acquired technology

Amortization of other acquired intangible assets

Goodwill and intangible asset impairment charges

Professional fees for business combinations

We also exclude the following items from non-GAAP net income (loss) and
diluted net income (loss) per share:

Gains and losses on debt securities and other investments

Income tax effects of excluded items and discrete tax items

Discontinued operations

We believe that these non-GAAP financial measures provide meaningful
supplemental information regarding Intuit’s operating results primarily
because they exclude amounts that we do not consider part of ongoing
operating results when planning and forecasting and when assessing the
performance of the organization, our individual operating segments or
our senior management. Segment managers are not held accountable for
share-based compensation expense, amortization, or the other excluded
items and, accordingly, we exclude these amounts from our measures of
segment performance. We believe that our non-GAAP financial measures
also facilitate the comparison by management and investors of results
for current periods and guidance for future periods with results for
past periods.

The following are descriptions of the items we exclude from our non-GAAP
financial measures.

Share-based compensation expenses. These consist of non-cash
expenses for stock options, restricted stock units and our Employee
Stock Purchase Plan. When considering the impact of equity awards, we
place greater emphasis on overall shareholder dilution rather than the
accounting charges associated with those awards.

Amortization of acquired technology and amortization of other
acquired intangible assets. When we acquire an entity, we are
required by GAAP to record the fair values of the intangible assets of
the entity and amortize them over their useful lives. Amortization of
acquired technology in cost of revenue includes amortization of software
and other technology assets of acquired entities. Amortization of other
acquired intangible assets in operating expenses includes amortization
of assets such as customer lists, covenants not to compete and trade
names.

Goodwill and intangible asset impairment charges. We exclude from
our non-GAAP financial measures non-cash charges to adjust the carrying
values of goodwill and other acquired intangible assets to their
estimated fair values.

Professional fees for business combinations. We exclude from our
non-GAAP financial measures the professional fees we incur to complete
business combinations. These include investment banking, legal and
accounting fees.

Gains and losses on debt securities and other investments. We
exclude from our non-GAAP financial measures gains and losses that we
record when we sell or impair available-for-sale debt securities and
other investments.

Income tax effects of excluded items and certain discrete tax items.
We exclude from our non-GAAP financial measures the income tax effects
of the items described above, as well as income tax effects related to
business combinations. In addition, the effects of one-time income tax
adjustments recorded in a specific quarter for GAAP purposes are
reflected on a forecasted basis in our non-GAAP financial measures. This
is consistent with how we plan, forecast and evaluate our operating
results.

Operating results and gains and losses on the sale of discontinued
operations. From time to time, we sell or otherwise dispose of
selected operations as we adjust our portfolio of businesses to meet our
strategic goals. In accordance with GAAP, we segregate the operating
results of discontinued operations as well as gains and losses on the
sale of these discontinued operations from continuing operations on our
GAAP statements of operations but continue to include them in GAAP net
income or loss and net income or loss per share. We exclude these
amounts from our non-GAAP financial measures.

The reconciliations of the forward-looking non-GAAP financial measures
to the most directly comparable GAAP financial measures in Table 1
include all information reasonably available to Intuit at the date of
this press release. These tables include adjustments that we can
reasonably predict. Events that could cause the reconciliation to change
include acquisitions and divestitures of businesses, goodwill and other
asset impairments, and sales of available-for-sale debt securities and
other investments.